Budget Cuts Conundrum

G-d Over Money.jpeg

So I’m hearing two opposing themes about the proposed federal budget cuts:


1) It’s horrible because we are cutting into the bone and this is going to really hurt a lot of important government programs.


2) It’s great because we have been spending money that we don’t really have, and we need to finally reign it in. 


Let’s face it, we’ll never get such drastic cuts across the civilian government unless this country goes into severe crisis mode–which never happens until it’s too late and something terrible has happened. 


If we even got half the cuts being proposed–which most people don’t seem to believe will even happen–that would be significant and painful itself. 


The truth of the matter is that we are facing enormous danger on both the national security and financial fronts!


– Militarily–Russia, China, Iran, North Korea pose huge threats including those involving weapons of mass destruction. 


– Financially–We have a serious national debt to the tune of $20 trillion, an annual trade deficit of half a trillion dollars, and social security and medicare trust funds that are going bankrupt. 


If we let these threats run their course, we will eventually have a crisis that will be truly nationally catastrophic. 


So what’s it gonna be–guns or butter–or national bankruptcy. 😉


(Source Photo: Andy Blumenthal)

The Unsustainable U.S. Economy

Unsustainable EconomyThe U.S. National Debt often touted at an enormous $18 trillion is really more than 3 times that amount and closer to a whopping $65 trillion!


That’s when you actually count all the unfunded liabilities for civilian and military pensions, retiree healthcare, social security, and medicare.


For each of the 318.9 million people of that United States, it mean $203,826 of debt or for a family of four that’s a debt of $815,303.


Put another way, the entire net worth of Americans is $84.9 trillion, but after subtracting the debt of $65 trillion, it drops to just about $20 trillion–coincidentally around the amount of our new debt ceiling.


Moreover, with the richest 1% owning more than 50% of the wealth by 2016 that leave only $10 trillion or $31,675 for each of us–not so hoity toity for 239 years of independence and founding as a nation or all the blood, sweat, and tears we put in every day of our lives.


In terms of our escalating debt, just this last year alone, social security spending went up to $944,143,000,000 or the equivalent of $6,345 for every American with a job. and this is projected to dramatically rise with the retirements of the baby boomers.


Projections are for social security to exhaust its funds by 2035, which could result in across the board 20% or more cuts in benefits of the already meager program where many seniors end up eating cat food.


Additionally, the retirement age already set to go to 67 by 2027 could be forced to go even higher, and social security would likely be curtailed or eliminated entirely above certain income levels.


Is this the financial security and brighter future we are leaving our children and grandchildren?


We can kick the can down the road, but the unsustainability of it all will eventually come back to haunt us. 😉


(Source Photo: here with attribution to Pictures of Money)

A Feel Good But Deeply Ailing U.S. Economy

Stagnant Salaries

Get comfortable with your salary, because it isn’t going anywhere positive–payrolls are stagnant!

The Wall Street Journal reports that wages since the recession “have grown slowly, advancing at a pace of about 2% annually” for a total of 12% since 2009.

In contrast, in the 20 years prior to the recession, wages “grew on average better than 3% annually”–that’s 50% more increase per year!

Sure some of the increase is now coming in the form of benefits growth, such as time off, subsidized commuting costs, and health insurance premiums, but workers still need to be able to pay their bills.

For the federal workforce, things have even been worse with pay raises of “just 2% [total] over the last five years” and a proposed 1.3% (with locality pay) for 2016.

Is it surprising then the innovation–one of our greatest strengths–is also drastically slowing in the United States. We are not rewarding risk with reward like we used to–and that changes the whole innovation equation!

Also no surprise then that mergers and acquisition are booming as the key to corporate growth as well as cost-savings through economies of scale are seen as one of the only ways to wring out profit growth in companies bottom lines.

All in all:

– While inflation is up an average of 2.13 over the same 10-year period.

– This leaves the average household more than 6% worse off then they were a decade ago…that’s a lot of time to be working and getting negative returns on your investment of time and effort.

Combine this with:

– Manufacturing down to only 9% of jobs in the U.S. economy

– The country’s ongoing spending binge–a national debt that has doubled over 8 years from around $10 trillion to almost $20 trillion by 2017 and interest payments about to take off with rising interest rates.

– Throw in a arms-race with China and Russia and the aging Baby Boomers setting up the economy for dramatic increases in Social Security and Medicare

And the “fun” NOT is only just beginning. 😉

Self-Perpetuating Immigration For All The Wrong Reasons

Business Lover

So this is the prevailing misguided logic by some for more immigration. 


We need immigrants to “reduce the ratio of retirees to workers.”


Why? 


Because the birth rate has fallen to below replenishment rates (roughly 2.1 births per women). 


And since our “trust funds” for social security, medicare, pensions, and the like have NOT been been kept in trust, BUT INSTEAD have been squandered on other things…


Therefore, according to this warped thinking we now need a wave of immigrants to come save us–have lots of babies and grow our economy–to pay for what we should be able to, but can’t–because of gross mismanagement and corruption with the money that was taken out our payroll all our lives supposedly to care for us in our elder years. 


The wrong reasons for immigration are expressed by Charles Kenny in Bloomberg Businessweek.


– According to Kenny, “More immigration is both the cheapest and most effective response to the challenge of a shrinking, aging population,” which he frets is “ominous for pension and health-care costs.”


Kenny’s approach to immigrants is that they are not vital and talented human beings, but rather basically baby machines with higher birth rates for population replenishment, as he states, “Although immigrants rapidly adopt the fertility patterns of their new countries, they still tend to produce more children to begin with.”


– And he says, because most come over as adults, we have the benefits of the workers “without the expense and delay of rearing…[them as] children.”

– Oh, and by the way, Kenny says, “Some newly arrived workers help provide cheap child-care options.”


Wow, how biased, cold, and condescending is that!


Not once does Kenny mention or advocate for immigration for any of these truly worthy reasons:


– Shelter from persecution 


– Political asylum


– Promote diversity


– Bring in needed skills, investment, and innovation 


– Rejoin families


And what is the result of bringing in immigrants to pay our way?


Well, we’ll need to bring in yet another and another, wave after wave of immigration, because we can’t balance of budget and spend rationally, responsibly, and with an eye toward the future–it’s self-perpetuating immigration for the sake of deadbeatism. 


Sweet land of liberty is being thrown out for a bunch of economic opportunists who feel we need “immigrants to [come to] the rescue” rather than join together with us in being great in terms of compassion, humanitarianism, and mutual respect. 


(Source Photo: Andy Blumenthal)

Time Runs Out – What Are We To Believe?

Lama

Time runs out, but we are still chasing highly elusive goals (just some examples): 


1) Iran – Time runs out on deadline for a nuke deal even after “the framework” was supposedly set three months ago. And as Iran’s Supreme Leader and the Iranian Parliament chant death to America, can we really believe that Iran will ever truly give up their pusuit of nuclear weapons of mass destruction (and terrorism) to use on you know who?  


2) Greece – Time runs out on an extension of more Greek bailout funds, and they default on payment to the International Monetary Fund potentially leading to their exit from the Euro and the EU. With a Greek debt of $271 billion, can we really believe they will ever be able to repay this? 


3) Social Security and Medicare – Time is running out on the solvency of our own social entitlement system in the U.S.  For example, the Social Security Disability Trust Fund runs dry already next year in 2016, Medicare is exhausted by 2030 and Social Security by 2033. With just 16 and 19 years of funding left for these major programs that tens of millions depend on, can we really believe that magically we will dig our way out of this mega mess of a financial hole? 


4) Global Warming – Time is running out on cutting carbon emissions leading to global warming and catastrophic climate change. With global warming denial still in vogue and reluctance by the industrial nations to significantly cut back on emissions in time, can we really believe that catastrophic enviornment damage will be averted? 


5) War – Time is runing out as potential for eventual war looms on the horizon with China, says respected DoD Futurist, Peter Singer. With disputes in the South China Sea and with Taiwan, China bulking up on advanced weapons, and the U.S. pivoting to Asia, the fears of a serious confrontation are there. Similarly, with Russia and it’s annexation of Crimea and ongoing fighting in eastern Ukraine, threats to it’s Balkan neighbors, confrontations on the European borders, and an increasingly nuclear and militant Russia, the Cold War is heating up. The last world war ended 70 years ago, can we really believe that the peace will continue to prevail with powerful adversaries in turbulent and uncertain times? 


Yes, hopes and dreams are important, but real concrete action is too or time will simply run out and then what? 😉


(Source Photo: Andy Blumenthal) 

Have It When You Need it

Candy_machine

At an event that I attended recently, I heard a young woman explain her philosophy on life.

She said, her grandmother taught her: “Better to have it and not need it, than need it and not have it.”

Thinking about it at the time, it seemed pretty wise–because you never want to be without something you really need. 

And good planning and survival skills say to always be prepared–you never know what happens. 

But then with the fiscal cliff and all the talk about social entitlements, I started to think about this some more. 

In a sense, as a society, we have come to think of social entitlements as something that we better have in case we need it–Unemployment Insurance, Medicare, Social Security, Medicaid and more. 

You never know when it’s your turn to get laid off, sick, old, or needy. 

And isn’t that what’s it for–it’s a safety net–these are like personal insurance and you never want to need the coverage and not have it. 

But as we should know by now, having it–doesn’t come for free. 

So the question is how much social entitlements or insurance do you need–and part of the answer is how much can you afford. 

So is it really better to have it and not need it, than need it and not have it–if you can’t afford what you’re buying?  

In this case, our grandparents and parents having it and not really needing all of it–may mean that we and our children will not be able to have it when we do need it. 

To have social entitlements, we need to be able to pay into the system for it or borrow to finance it. 

Unfortunately, as a nation we have been doing more borrowing, because we have spent beyond our national means–we have even raided our very own social entitlement programs that we hold so dear, to pay for other things–maybe that’s why they call it a trust fund, because you really do have to trust, almost blindly, that there will be something there, when it’s your time to need it. 

It’s great to have it, but if we are gluttons and don’t responsibly plan for genuine needs–then as a nation, we really will be left needing and not having it when the time comes.

In short, spend all your money to soon, and tragically, there won’t be any candy later. 😉

(Source Photo: Andy Blumenthal)

Putting Children Above Ourselves

Folk_festival

What a distorted editorial this morning in the Wall Street Journal called “What’s Really Behind the Entitlement Crisis.”

Oh, thank goodness (NOT) that we have these pundit-types to tell us what’s “really” happening and feed us their self-serving “proofs.”

Anyway, the author, Ben Wattenberg, contends that we all are suffering a decline in standard of living because we don’t have enough children.

He actually advocates that we have more children to bear the burden of our waste, fraud, and abuse and inability to live within our means.

The author writes: “Never-born babies are the root cause of the ‘social deficit’ that plagues nations across the world and threaten to break the bank in many.”

Never mind that current world population of over 7 billion people is anticipated to rise above 9 billion by 2050, and we continue to spoil and deplete our world’s limited resources already.

The author selfishly contends that “Declining birth rates mean there are not enough workers to support retirees.”

Unfortunately, the author ignores that if current and prior workers and politicians did not spend down the balances in social security to finance other pork-barrel political initiatives, then each workers savings would still be there to support their retirement, and we would not have to rely on future generations to make up the difference by spending their savings to support our prior excesses and waste.

Wattenberg ends by saying that “The real danger for the future is too few births.”

Like a glutton, he advocates that we eat more in order to keep trying to satiate our insatiable spending needs.

When I was a kid, my father used to joke about eating too much and say we should do some push-ups–push the the table (with all the food) away from us!

No, like teenagers on day time TV shows, who contend that they want to have children because they feel it is their “way out” of their problems and only then they will be loved and be able to love, and the TV show host puts them in a program with a fake baby that cries and makes at all the inconvenient hours of the day and night, does the teenager realize that having (more) children is not the answer to their problems, but actually may only increase their problems.

Having more children as a nation–we already average about 2 per family–in order to finance our retirements and entitlements through the development of another generation of a slave labor pool is completely misguided.

Have children for the right reasons–out of genuine love and a commitment to give–not to receive.

Mr. Wattenberg does not seem to care if children are brought into the world of broken families, poverty, violence, drug and alcohol abuse, molestation and incest, homelessness, and separation and divorce, because Wattenberg’s standard of living is at stake.

Bring children into a world that is giving, loving, and sustainable.

Safeguard life, but don’t recklessly encourage birth.

Birth is a privilege of the young, not an entitlement for the elderly.

(Source Photo: Michelle Blumenthal)